Blockades and the Economy: Where are Peace, Order and Good Government?

This article was originally published in Policy Magazine, Feb.11 2022.

If “supply chain” was the economic term of the year for 2021, “blockade” is now on track to be the one that enters the public consciousness in 2022.

While we have become accustomed to frictions at the border that slow the movement of goods, the last few weeks have been a rude awakening. What started as a protest against vaccine mandates for truck drivers has evolved into a disparate group of dissidents who lack a single leader or even a single agenda, but instead reflect opposition to a range of COVID policies and to the current government.

At time of writing, things have escalated from the occupation of downtown Ottawa and a blockade at the Coutts border crossing in Alberta to the crossing at Emmerson, Manitoba and the closing of the Ambassador Bridge to traffic coming into Canada. The Ambassador Bridge is the busiest international crossing in North America; the major artery through which flows a quarter of Canada-US trade, with up to $400 million of goods passing each day, including $50 million in auto parts. We are seeing the real impacts of this with shift cancellations and shutdowns for our major automotive manufacturers and parts suppliers.

Unfortunately, the situation shows no signs of abating yet, to the detriment of Canadians’ livelihoods. With the blockades still ongoing and other points of entry able to partially absorb traffic, the precise costs will not be known for some time. The unprecedented nature of the current protests does not have an historical precedent for us to gauge the economic hit. The Parliamentary Budget Officer estimated the economic impacts of the February 2020 rail disruptions to be $275 million. However, what is happening now feels qualitatively different and of a larger magnitude.

There would never be a “good time” for such a blockade to occur, but now feels like the worst time that this could have happened. Businesses are still dealing with the impact of Omicron on their operations and the supply chain remains fragile in Canada, given the lingering impacts of extreme weather events in British Columbia last year, difficulties to secure shipping, and the highest inflation in three decades squeezing already tight margins.

The strain is not only on businesses, but also has a psychological impact on Canadians. The last two years have been trying for even the most resilient individuals, and the ability of a small group to shut down one of the most critical pieces of national infrastructure is both troubling and sets all the wrong precedents. The right to protest and voice opposition to any government policy is an inalienable right of Canadians, yet the blockades strike at the core of the balance of freedoms that are needed for our country to function. Without the rule of law, all of our rights are in jeopardy.

Contrary to the popular saying, any publicity is not good publicity. The blockades have been well noticed in other jurisdictions, including the United States, Australia, United Kingdom, and Germany. While dollars and cents — like tax rates or regulatory compliance — are fundamental to business investment decisions, perceptions and trust matter, too. Canada already suffers in some quarters from challenges as to the friendliness of the business environment, whether it is about our competitiveness or the ease of moving goods across the border. This is not to suggest that a single metric makes or breaks an investment decision, but rather it is the cumulative impact this has on the desirability of our country as a place to do business. The blockades do not help. Already, we are seeing calls by American politicians to permanently move manufacturing across the border because Canada can’t be counted on to deliver our products when they are needed.

What our political leaders do in the days ahead matters hugely for our country.

This is not an academic exercise. It is the real deal. We are only about a week into the border blockades and already the ripple impacts are being felt. Doing nothing — and allowing the blockades to metastasize — will only cripple the economy and create a larger backlog to grapple with after the blockades end.

There aren’t any easy choices for political leaders to manage a volatile situation, while ensuring the independence of policing forces. There is the added complexity that the blockades do not have a clear leadership structure that can be engaged in a negotiation.

A poll by Leger that was in the field after the Ottawa blockades started, but before the Ambassador Bridge blockades, found that 62 percent of Canadians opposed the convoy’s messages around public health issues, but nearly one-third of Canadians did support those messages. Our country has faced deep divisions before — whether we are talking about the Quebec referendums of 1980 and 1995 or even further back in instances such as the Conscription Crisis of the Second World War. We need leadership to drive forward a resolution to the blockades.

There are three measures that governments can undertake to step up and deliver:

The first is to secure other major pieces of transportation infrastructure. There is no telling where else blockades could emerge. Governments need to ensure the situation is not compounded with other pieces of infrastructure becoming inoperable. The success of the current blockades risks provoking copycat behaviour.

The second is the need for clear messaging from the top. The prime minister, premiers, and key opposition leaders need to communicate that disruptions to critical infrastructure are not acceptable. Leadership means making tough and sometimes unpopular decisions, and our leaders need to rise to the demands of the time. Where the national interest is at stake, there is no room for petty partisanship or squabbling over jurisdiction.

The third is the need for enforcement. The legal frameworks are in place to enable basic protections of infrastructure. It would be an abdication of leadership to not use the tools available to ensure that our economy can function.

Inaction is not an acceptable response. Peace, order and good government are central to the Canadian constitution. Right now, you could drive a truck through the gap between that ideal and our current reality.

Perrin Beatty, P.C., O.C., is the President and CEO of the Canadian Chamber of Commerce. He held a number of cabinet positions including National Defence, Foreign Affairs, Solicitor General and Minister of Health, among others. 

Mark Agnew is the Senior Vice President, Policy and Government Relations, of the Canadian Chamber of Commerce.